Are homebuyers waiting for lower mortgage rates?
Existing home sales across the US plummeted to their lowest level since 2010 last month, with would-be homebuyers continuing to take a wait-and-see approach in anticipation of lower mortgage rates down the line.
The National Association of Realtors (NAR) said that September home sales came in at a seasonally adjusted annual rate of 3.84 million units, a 14-year low and 1% down from the prior month.
While a drop in mortgage rates over the summer fueled hopes of a housing market resurgence, those rates have trended upwards in recent weeks thanks in part to a stronger-than-expected labor market and other resilient economic data.
Lawrence Yun, the NAR’s chief economist, also flagged the looming presidential election as a potential reason for prospective homebuyers’ current reluctance to enter the housing market despite an improved housing supply outlook.
Existing-home sales slid 1.0% in September. Three out of four major U.S. regions registered sales declines while the West experienced a sales bounce. https://t.co/ST6IRAPItu
— National Association of REALTORS® (@nardotrealtor) October 23, 2024
“There are more inventory choices for consumers, lower mortgage rates than a year ago and continued job additions to the economy,” Yun said in remarks accompanying the news release.
“Perhaps, some consumers are hesitating about moving forward with a major expenditure like purchasing a home before the upcoming election.”
Year over year, housing supply has spiked by 23% and increased 1.5% between August and September, with 1.39 million available units representing the highest level of inventory since October 2020.
Home prices are also up, with the median existing home price coming in at $404,500 last month – a 3% increase compared with the same month in 2023.
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